New 30 day rule for debt collectors

Debt collectors have agreed with Government to give 30 days' breathing space to borrowers struggling to repay debts.The new 30-day rule, agreed with the Credit Service Association (CSA), which represents debt collection agencies, will start once an accredited debt advisor has been appointed.

Consumer Minister Gareth Thomas said: "This new 30-day rule will give people a breathing space to help them take control of their finances as well as encourage them to seek help from debt advisors...I welcome the CSA's recognition that this is an important and sensible commitment to have made to borrowers."

Kurt Obermaier, Executive Director of the CSA, said:"We have an agreement to allow a 30-day breathing space in the hope and expectation that this will ease the pressure on the debtor and more likely result in a positive outcome for all."

It means that debt collection agencies will not contact debtors to pursue debts for 30 days once they have been informed that an accredited debt advisor has taken on the case. This will allow an accredited debt advisor to negotiate with creditors and the collection agency so that a plan for repaying the debt can be agreed.

In addition CSA members will be required to inform borrowers of the availability of accredited advisory services.